Which is better, a shorter-term or longer-term car loan?

I don't know how long my car loan should be. Is one with a shorter term better, or vice versa?

Answer
Generally speaking, a shorter-term loan is better. You’ll pay off your balance more quickly and pay less interest with a lower rate and shorter term. Plus, once your loan is paid off, your car will have a higher resale value.
The one problem is that a shorter-term loan will come with a high monthly payment if you can’t make a large down payment. If the proposed monthly payment on a shorter-term loan is unaffordable for you, then you may be shopping beyond your means.
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Jim Donaher
Answered on Mar 08, 2021
Jim Donaher is a freelance writer and manager with over 35 years' experience in the insurance, banking, and investment management businesses. He provides expertise on a range of topics and is able to explain complex industry information in layman's terms. Jim is the author of two books, including Call Him, He's Home: A Guide to Prayer for Regular People and Then Larry Smiled, a novel about life, death, accountability, and salvation. Taormina, Sicily is his happy place!
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